Note(s): The table exhibits the marginal impact of the Dodd–Frank stress tests for banks with a Post-DFA increase in regulatory uncertainty post-Dodd–Frank compared to the pre-Dodd–Frank period on tax avoidance (Cash ETR) and TAI, using our four different measures of bank uncertainty. Post-DFA Intensity in R.U., Post-DFA intensity in R.U.S., Post-DFA Intensity in tax-related R.U. and Post-DFA Intensity in portfolio uncertainty are dummy variables equal to 1 for categories of large banks and regional banks in the top tercile increase in the regulatory uncertainty, regulatory uncertainty sentiment, the tax-related regulatory uncertainty and the portfolio-related uncertainty sentiment, respectively, in the post-implementation of Dodd–Frank period (2011–2016) compared to the years 2005–2010. StressTest is a dummy variable equal to 1 for CCAR stress test banks and zero for Non-CCAR stress test banks. The dependent variables are the contemporaneous and the three-year rolling average cash effective tax rate and the TAI. Control variables include the bank characteristics as shown in Table 2. Bank and year-fixed effects are included in the regressions. Standard errors are clustered at the bank level and are reported in parentheses. ***, ** and * indicate significance at the 1%, 5% and 10% levels, respectively

Source(s): Authors’ own work